Mayberry 2005: Question 8 Ethical Behavior

Question: How does your organization promote and ensure ethical behavior and interaction with co-workers, suppliers, customers and partners, and number two, how do you monitor and respond to breaches of ethical behavior?

Steven Hoisington: It's easy to talk about putting a policy in place about ethical behavior. I'm sure Enron and Tyco and other companies like that had policies in place as well. It's another thing in terms of how does the organization actually behave, especially with the senior leaders. I think employees get a sense in many regards in terms of how well the organization in fact, walks the talk in terms of is ethics important or not. It gets brought up all the time, and we talk about we won't do business in certain parts of the world. If it means that we have to accept that you give bribes. A lot of this stuff is demonstrated through action. I've been fortunate in terms of my career with IBM having a strong focus and emphasis on ethics. I remember when I changed careers and I went to Johnson Controls. And ethics is an important personal value of mine as well and is one of the things I looked at in the next company. Johnson Controls professed to be an ethical organization. Our CEO was named one of the top eight most ethical CEOs in corporate America and I know people ask me where was he ranked 1-8 and I say I don't know. But they couldn't find 10 that was the unfortunate part of it. So that doesn't say a lot in how our senior executives actually behave and demonstrate stuff but to me ethics is important and I was always proud even today to talk about Johnson Controls as an organization in terms of you know when our competitors chose to take a short cut and do things unethically Enron, Tyco, you can go on down the list and they're now out of business. Johnson Controls ended up demonstrating to the rest of the world that you can behave in an ethical manor and still make profits and deliver all of the things that are important. So ethics is important to business delivery. You can do it through policy but its more through action that you make things happen and you have to be serious about breeches of ethical behavior. If somebody breeches an ethics policy the cost of that is termination; maybe not as sever as termination but you have to take action based on that.

Jack Swaim: The values of the leaders and the founders of the company if people still know about them and that sort of thing are really important and at HP but that's similar to some of the companies that I've worked. The company ethics are seen enough, known enough that there is a natural selection process even in hiring that you tend to hire people that have demonstrated they have an ethical compass that's pointed in the right direction. So it's not about instilling ethics into people when they're hired although we have other policies and training and all these things. I don't mean to minimize those but a whole lot of it goes to the way they're hired. In one of the prior companies where I worked I was with my CEO, and we were doing some bench marking with Nordstrom's. And the CEO of the company where I worked was really proud of the training material that we had prepared and that the company was using. And he asked the senior individual at Nordstrom how they did their training and he was just waiting to kind of compare because he thought his was so good. And this guy burst out laughing at him. And this is a guy who is 64 and has been CEO for 25 years and so on and he thought WHAT? And the guy burst out laughing and he said we don't train them. Mom and Dad trained them. And if they didn't train them right, we don't hire them. A nd it was just this blinding flash of the obvious. Now in fact we were doing that also but he hadn't thought about it that way. And so it's a lot easier if mom and dad train them well about ethics than to try and somehow pound it into them or whatever after they have arrived. So anyway I will just stop with that short story but it was one those things that I thought duh.

Dr Reimann: Any other quick comments about that?

David Jones: Building on what Steve said and tying it back to Baldrige I think the statistics are pretty clear the highest scoring category in the Baldrige business model is based on seven categories and of the winning organizations the highest scoring category is leadership. And so when they walk the talk it's evident within the company and you see it in the high performing organizations

Dr Reimann: And difficult to rehearse with people, it's got to be apart of their way of thinking and the mode of operation of the company. You can't give a lecture and have everybody suddenly convey the ethical line this is very difficult.

Dr Reimann: Well I think we've reached the end of our session. We really appreciate your interest and your attention and I would like for you to please join me in thanking our very effective and creative and caring board who comes here to Tech every year and gives us the benefit of their experience. So thanks very much folks. [applause]